SAP GST Implementation Road Map

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‘G’ – Goods‘S’ – Services‘T’ – Tax

“Goods and Service Tax (GST) is a comprehensive tax levy on manufacture, sale and

consumption of goods and service at a national level.

Goods and Services Tax (GST) is a proposed system of indirect taxation

in India merging most of the existing taxes into single system of taxation. It was

introduced as The Constitution (One Hundred and First Amendment) Act 2016.

GST in India is slated to have the following components:

Central Goods and Services Tax (CGST) – Levied by Centre

State Goods and Services Tax (SGST) – Levied by State

Integrated Goods and Services Tax (IGST) – Levied by Central Government on Inter-

state supply of Goods and Services

What is GST?

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GST Impact on Existing Tax System

Sl. No.

Subsumed under CGST Subsumed under SGST

1 Central Excise Duty VAT / Sales tax

2 Additional Excise Duties Entertainment tax (unless it is levied by the local bodies).

3 Excise Duty-Medicinal and Toiletries Preparation Act Luxury tax

4 Service Tax Taxes on lottery, betting and gambling.

5 Additional CVD State Cesses and Surcharges (supply of goods and services)

6 Special Additional Duty of Customs - 4% (SAD) Entry tax not in lieu of Octroi

7 Surcharges

8 Cesses

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Proposed

Solution on

SAP GST

Implementation

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Mandatory Pre-Requisites for SAP GST

• Tax Procedure should be on TAXINN, if not migrate from TAXINJ to TAXINN

• Recommendation to move to the latest support pack (SAP Note 1175384 for GST)

SAP_APPL_Release Support Pack

• SAP ERP 6.0 (600) SP 26• EHP2 for SAP ERP 6.0 (602) SP 16• EHP3 for SAP ERP 6.0 (603) SP 15• EHP4 for SAP ERP 6.0 (604) SP 16• EHP5 for SAP ERP 6.0 (605) SP 13• EHP6 for SAP ERP 6.0 (606) SP 14• EHP6 for SAP ERP 6.0 for HANA (616 – SAP HANA) SP 08• EHP7 for SAP ERP 6.0 (607) SP 07

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Road Map for Migration TAXINJ to TAXINN

• The following notes should be implemented before the migration procedure.SAP Note 2167294 - Activate a update programedSAP Note 2153807- Improvements in updated programSAP Note 2161911- Solution for TAXINJ document reversal/cancellation

• For TAXINN need to create own separate access sequence.• Users can use the same condition type from TAXINJ in TAXINN. If there are any new

condition types which the client requires it can be added in TAXINN.• We can maintain the tax rate at FV11 based on condition types and also maintain at

FTXP however both data will be updated in same tables.• GL determination can be same as TAXINJ.• The tax conditions and accounting keys used in TAXINJ can be utilized as same in

TAXINN.• Assign tax codes to company codes.• Assign GL Accounts to new tax codes and create existing tax codes of TAXINJ in TAXINN• All your open PO”s ,GRs need to migrate to TAXINN.

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Tax Registration Define GST Registration levels

Master data Maintenance Business Partner Tax Data, GST Accounts

Tax Configuration & Computation

Configure Tax and Procedures; Tax computation; TAXINN

Document Numbering Outgoing Invoice Numbers

Business process Localization Extend Support to currently localized Business Process

GST Tax postings GST Input and Output Tax postings

Utilization Input Tax credit utilization against payable for GST Taxes

Reporting Tax Register

GST Road map with TAXINN

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Resources

Resources in Number Place of work

1 - FICO Consultant ONSITE

1 - MM Consultant ONSITE

1 - SD Consultant ONSITE

3 - ABAP Consultants OFFSHORE

1 - BASIS Consultant OFFSHORE

GST Registration

GSTIN – GST Identification number

• Single registration for CGST, SGST and

IGST

• Individual registration to be obtained

in each state of business establishment

• PAN based registration number – Up to

15 characters in length

TAX Registration

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GST Registration in SAP

Capture GST registration at Business place level level

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Master data maintenance

Business Partner Tax data• GST reg no. to be captured for each

registered customer and vendor• Tax Indicator to be maintained in Material

& Service Masters

GST Tax Accounts• Separate tax A/P and A/R accumulation

might be required at GST Registration level• To be defined for CGST, SGST and IGST

separately

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Master Data Changes with GST

• HSN code field will be added newly in Material Master• SAC code field will be added newly in Service Master• New GST Tax accounts will exist• Customer GST registration numbers will be maintained at

customer masters• Vendor GST registration numbers will be maintained at vendor

masters

Customer/Vendor GST Reg in SAP

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Tax configuration and Computation

• Intra State TransactionCGST – Central GSTSGST – State GST

• Inter State/Import TransactionIGST – Integrated GST

• Export TransactionZERO Rated

• Region level rate variations may exist• New condition types/access sequences and account

determination

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GST Tax /Pricing procedure

Tax Procedure – New Condition Types

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GST Document Numbering

Unique sequential numbering for outgoing GST invoices • Criteria for legal numbering may be

specified by govt. • It could be for example:

Registration level Document type (Invoice / Credit Memo) A combination of above

Assign Number Range to Business Place

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Business Process Localization

• Sales Processes

• Procurement Processes

• Stock Transfers

• Subcontracting

• Others

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SD Pricing procedure

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SD Pricing Procedure - New condition Types

Sales Process

Sales Order

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Sales Process

Billing Document A/R

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Procurement Process

Purchase Order

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Procurement Process

Vendor Invoice (A/P)

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GST Tax Postings

• Separate accumulation of credit and payables for CGST,SGST and IGST

• Separate accumulation at Registration level

• Automatic Tax posting to respective accounts from business processes

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GST Tax Postings at A/R & A/P

Billing (A/R) Accounting Document

Vendor Invoice (A/P) Accounting Document

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GST Utilization

Utilization of Input tax credit would be as under

• Input CGST to be utilized against output CGST and IGST

• Input SGST to be utilized against output SGST and IGST

• Input IGST to be utilized against output IGST, CGST and SGST in the order of IGST, CGST and SGST

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Reporting

• Tax register CGST SGST IGST

• Registration level segregation

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GST Digital India

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GST Network

• Goods and Services Tax Network (GSTN) is a Section 8 (under new companies Act, not for profit companies are governed under section 8)

• GSTN primary purpose is to provide IT infrastructure and services to central and state governments

• Infosys, which a few months ago won a landmark Rs 1,380-crore contract from the government to develop a state of-the-art technology platform for the proposed goods and services tax (GST), is going ahead with the project despite the delay in the GST Bill getting passed, according to ministers and executives directly familiar with the matter.

GST Suvidha Provider

• In the evolving environment of the new GST regime it is envisioned that the GST Suvidha Providers (GSP) concept is going to play a very important and strategic role. It is the endeavour of GSTN to build the GSP eco system, ensure its success by putting in place an open, transparent and participative framework for capable and motivated enterprises and entrepreneurs.

SAP ASP vs. GST GSP

• SAP India will be an Application Service Provider (ASP) for the upcoming Goods and Service Tax (GST) implementation in the country.

• The GST regime will see two players – GST Suvidha Provider (GSP), and Application Service Provider(ASP) for the last mile connectivity that goes digital.

GST Return Forms

• GSTR-1 Outward Supply(Sales)• GSTR-2 Inward Supplies(Purchases)• GSTR-3 GST Returns• GSTR-4 Quarterly Returns• GSTR-5 Returns for non resident • GSTR-6 Returns for input service• GSTR-7 TDS Returns• GSTR-8 Annual Returns

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